Director Of Income Tax Exemptions,Chennai v. M/S.sriarunachala Smaranamrutam Trust39

In the High Court of Judicature at Madras Dated: 05.01.2015 Coram The Honourable Mr.JUSTICE R.SUDHAKAR andThe Honourable Mr.JUSTICE R.KARUPPIAH Tax Case (Appeal) No.403 of 2013 Director of Income Tax Exemptions,Chennai. Vs. M/s.SriArunachala Smaranamrutam Trust#39/44, North AyyankulamAgraharam Street,Tiruvannamalai - 606 602. .... Appellant .... Respondent APPEAL under Section 260A of the Income Tax Act against theorder dated 06.02.2013 made in I.T.A.No.2116/Mds/2012 on the file ofthe Income Tax Appellate Tribunal 'B' Bench, Chennai as against theorder dated 28.9.2012 made in DIT (E) No.2 (1011)/11-12 on the fileof the Income Tax Officer (HQ)(Exemption) Chennai For Appellant : Mr.J.Narayanasamy Standing counsel for Income TaxFor Respondent: Mr.M.P.Senthil KumarJ U D G M E N T (Delivered by R.SUDHAKAR,J.) This Tax Case (Appeal) is filed by the Revenue as against theorder of the Income Tax Appellate Tribunal raising the followingsubstantial question of law: "Whether on the facts and in the circumstances ofthe case, the Income Tax Appellate Tribunal was right inholding that the assessee trust is entitled forregistration under Section 12AA of the Act?" 2. Learned counsel appearing for the Revenue fairly submits thatthe issue involved in this appeal is covered by a decision of thisCourt in T.C.(A)No.579 of 2013 dated 27.01.2014, wherein this Court,following the decision of this Court reported in (2012) 206 Taxman69 (CIT V. Arulmighu Sri Kamatchi Amman Trust), dismissed the appealfiled by the Revenue holding that the Revenue would not be justifiedhttps://hcservices.ecourts.gov.in/hcservices/in refusing the grant of registration at the threshold. For better clarity, the relevant portion of the decision of this Court reads asfollows: "9. In the present case also, the Revenue onlyquestions the trust not having commenced its activity forthe grant of registration. The provision under Section12AA of the Income Tax Act does not stipulate such acondition for grant of registration. On the other hand,Section 12AA (1) contemplates satisfaction of theCommissioner about the objects of the Trust and thegenuineness of the activities and make such enquiry as maybe necessary for the purpose of grant of registration. Inso considering the application, the Commissioner has togive an opportunity to the assessee as provided for underproviso to sub-section (1) of Section 12AA. Under sub-section (3) of Section 12AA, the Commissioner is givenpower to cancel the registration, if he satisfies that theobjects of such trust are not genuine or not being carriedon in accordance with the objects of the trust. When suchan authority is vested with the Commissioner to cancel theregistration in the event of the trust not being carried onin accordance with the objects of the trust, we do not findany ground to say that merely on the date of theapplication, the assessee trust had not commenced itsactivities, hence, registration could not be granted. Itis not denied by the assessee that on the date of theapplication under Section 12AA, it was yet to commence itsoperation. But nevertheless the genuineness of the objectsof the trust were not questioned by the Commissioner.Considering the fact that the continuance of registrationis further a subject matter of scrutiny by the Commissioneras contemplated under Section 12AA(3) of the Income TaxAct, we do not think that the Revenue would be justified inrefusing the registration at the threshold. The Tribunalhad followed the decision of the Gujarat High Court in thecase of CIT V. Kutchi Dasa Oswal Moto Pariwar Ambama Trustreported in 29 Taxman 228. We respectfully agree with thedecision of the Gujarat High Court." 3. The above-said view was followed by this Court, in which oneof us was a party (R.Sudhakar,J) in T.C.(A)No.261 of 2014 dated22.8.2014. 3. The above-said view was followed by this Court, in which oneof us was a party (R.Sudhakar,J) in T.C.(A)No.261 of 2014 dated22.8.2014. 4. Accordingly, following the decision of this Court in T.C.(A)No.579 of 2013 dated 27.01.2014, this Tax Case (Appeal) standsdismissed. The question of law is answered against the Revenue. Nocosts. Asst.Registrar (Lok adalat) Sub Asst. Registrar https://hcservices.ecourts.gov.in/hcservices/ sl To 1. The Income Tax Appellate Tribunal 'B' Bench, Chennai 2. The Director of Income Tax Exemptions, Chennai. 1 cc to Mr.J. Narayanasamy, Advocate Sr. 98 1 cc toMr. Philip George, Advocat,e sr. 86 CNR (CO)kk 12/2 Tax Case (Appeal) No.403 of 2013